By: Rashmi Chainani
Anyone binge watched the new Netflix show, Squid Game, yet? Or the new season of The Handmaid’s Tale on Hulu? Not yet?! You are missing out on such amazing shows! Seriously, just please watch these shows. I am looking at you *stares at you until you agree* I promise I am not this intimidating in real life.
Nevertheless, has anyone ever wondered how these platforms generate money? Throughout the past 25 years or so, streaming platforms have been the new gold mine for entrepreneurs since the demand for new movies, digital web series, and shows have been on the rise.
Classic shows from the 90s, like Friends, The Fresh Prince of Bel-Air, Dawson’s Creek, and Full House have been loved by the audience for decades. The key to keeping this love alive? Streaming platforms. Nowadays, these beloved shows are making a comeback and audiences of different ages are able to have access to these classics.
The founder of Netflix, Reed Hastings, got the idea for creating this platform when he had to pay a late fee for a movie on the platform Blockbuster. The initial investment for Netflix was $2.5 million, and it launched in 1997 when streaming movies through the internet was rare; however, Netflix was losing money and they were rejected many times when pitched to Blockbuster. Reed Hastings and Marc Randolph continued to promote their website and ended up accumulating over 120 million subscribers worldwide.
Hulu, on the other hand, was created by a group of executives in 2007 that saw the possibility of streaming services to be a large success. They were able to see the growth and the demand for streaming movies and TV shows; and eventually, they realized they were right. Now, the platform has 43 million subscribers all around the United States, and it is still growing to this day.
Streaming platforms are relatively new enterprises and a unique part of the ever growing market. Their business structure is unlike the “traditional” businesses that have been built a decade ago. Nowadays, streaming platforms are able to detect a consumer’s preferences through new and evolved tools that track a consumer’s data.
Platforms like Netflix, Hulu, and Disney+ use a business model, called the “subscription model,” where consumers pay a “subscription fee” to get unlimited content from these platforms. Just by paying this subscription fee, viewers are able to access this content 24/7, watch shows in high definition, avoid commercial advertisements, and more. You wouldn’t want to be watching the biggest twist in money heist when a toothbrush ad pops up wouldn’t you? No one wants that!
But, how do these services manage to keep their consumers loyal to their platforms? There are several aspects to this, one of them being portability. Consumers are able to access their favorite music, movies, and tv shows on the go. They are easily accessible on any of their devices and there is no limit to streaming them. Another aspect would be the variety in content a platform provides. If we take Netflix, for example, they have streaming content from all around the world, including their own shows, allowing consumers to access shows from the United Kingdom to South Korea.
Streaming platforms are definitely the new gold mine for entrepreneurs especially in a generation where creating content is easily accessible. It is easy to quit overworking nowadays, and these platforms give a chance for consumers to easily relax and unwind from wherever they are!
Bibliography